Software Liability Act in Connecticut – Good Idea or Too Much Regulation?

Do software publishers need more regulation to encourage creation of safe and reliable software?That was the general question posed for a debate at the RSA Conference USA on February 29, 2012. Sean Doherty of Law Technology News wrote an interesting article summarizing the two different positions. One side of the debate favors creating a regime of "civil liability for software manufacturers whose code causes harm to consumers." Opponents view a regime of civil liability for damages caused by software as another unnecessary regulation. In addition, opponents maintain that our existing laws already provide remedies for software liability.

In Connecticut, there is no software liability statute or act. However, there are various existing legal theories that might apply to the sale of defective software, including:

breach of contract;

breach of express warranty;

breach of implied warranty; and

misrepresentation.

Of course, there are also defenses to breach of warranty claims regarding software. In many instances, a software attorney writing a contract or license agreement will include a disclaimer of all warranties and a cap on damages.

Some consumers and purchasers do not have the ability to hire an attorney to negotiate a purchase of software. Will a software liability act prohibit such disclaimers? Conversely, not all software vendors or manufacturers hire a software lawyer to protect their interests by drafting appropriate disclaimers in license agreements and contracts. Will a software liability act also protect software publishers from frivolous claims?

As noted by the debaters at the RSA conference, everyone wants better, more reliable software. However, I doubt that creating a new software liability regime, and thus more regulation, is the right answer. I tend to favor the market solution. Let the better software win.